It’s been a good production year for alfalfa growers in California’s Central Valley, but strong demand from export firms is keeping a firm floor under prices, reports Norman Beach, vice president of the San Joaquin Valley Hay Growers Association in Tracy.
Alfalfa usually grows better after a relatively dry winter like most of the state experienced this year, Beach says. Alfalfa growers in most parts of the state have also had enough water for irrigation, always a potentially limiting factor for the crop.
On the demand side, exporters were buying early and have stayed active throughout the summer, he says. “They’ve taken a lot of the lower-end hay off the market. They aren’t looking for high-test hay. They just want clean, green and pretty.”
Depending on how far the product has to be transported, exporters are paying $185-210/ton in the stack for the most part. “Alfalfa with a little grass in it will bring the $210 price. Really nice alfalfa can bring as much as $220.”
Skyrocketing prices for corn and other grains have also strengthened alfalfa prices in recent weeks, says Beach. “Alfalfa is looking like a pretty good buy compared to other feeds right now.”
One recent sale of fifth-cutting alfalfa testing 58% TDN (90% dry matter) and 23.5% crude protein sold for $260/ton in the stack. “It was a pretty easy sale to make,” says Beach.
A summer heat wave has crimped production of supreme- and premium-quality hay in many areas, he adds. “A lot of dairymen are thinking there’s still a lot of hay out there, but it’s pretty much gone.”
As a result, he expects prices for dairy-quality hay will go higher as the summer progresses and inventories are cleaned out. How much higher depends mostly on developments in the dairy industry from this point forward. “The futures price for milk has been going up recently, but dairy producers really won’t start seeing much of an improvement in their milk checks until possibly next spring. A lot of them are really hurting right now.”
While no one is sure where things might settle out, growers and livestock producers alike are hoping that the current price increase runs out of steam before hitting the $300/ton mark, Beach says. “In the long run, that really wouldn’t be good for anyone.”
To contact Beach, call 209-610-9568 or email email@example.com.